The methods that are used for the appraisal of hotels are usually cost approach, sales comparison approach and income capitalization approach.
The difference between selling prices in the market of a similar facility and the cost value may be guiding for the feasibility of purchasing of an existing facility or building a new one.
It is not much applicable to use sales comparison approach which is related how much the market is ready to pay for a similar facility, because of the difficulty of finding two exactly the same accommodations.
Accommodation appraisal with income capitalization approach may lead to different evaluation of the same facility since appraisers make different assumptions and since it depends on both the estimation of annual net cash flow and choosing of discount rate.
In spite of too many variables in the hotel appraisals, the main criteria is value-performance standard, “occupancy rate”, “average room price” and “the number of rooms and beds”.
There are indexes in the developed countries that take into consideration of different variables related to hotels and calculates the reflection of these variables in the future in accordance with the current international financial criteria and publishes them. However, in our country these indexes are not available yet.
For this reason, every one hotel should be evaluated in its own conditions.
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